Self-Storage facilities around Hunstville. Saturated or growing ?

Question

My partner and I are looking at self-storage facilities around HuntsVille area. I understand this asset class was hot few years ago. Is it too late to invest in this space ?

I am mainly looking at outer areas such as Decatur, AL. On that point, I see Decatur population has ups & downs over past few years. Not sure what the reason was for the downward population until 2019. However, I see an uptick of numbers over past 2 years (assuming online census data is accurate).

Is it a good idea to buy commercial space such as storage facility in Decatur? If yes, any particular areas to absolutely avoid ?

Laurie McGuire · Answer

@Laurie McGuire

The market was terrible in Decatur just a few years ago. However overflow from Huntsville has changed that. Sadly the industrial plants along the Tn. River in Decatur have polluted the water so badly that it smells terrible and you can’t eat the fish from the River. Decatur has the highest crime rate in North Al. But that’s still a lower crime rate than most of the cities of its size in the nation.

As an investor specialist and investor myself I would not buy or steer clients there until the past two years. Decatur is a nice little city. I’m happy to say that I feel comfortable investing there now. I would still be careful of location. I will let you know if I am able to find storage units available to purchase.

Michael S. · Answer

@Bharath Mun - in my opinion, you only invest in Decatur if all you care about is cash flow.  If you want strong potential for appreciation, Decatur is not the area in North Alabama you should be looking at.

I'd recommend you see Huntsville, Madison, and Decatur for yourself - I think you will understand the census data very quickly when you drive through all 3 locations and compare them.

Bharath Mun · Answer

@Michael S. Thank you. I actually saw your comment on another thread and did my research. You are absolutely right, Decatur has seen downward curve from 2014 to 2019. However, it's seen an upward trajectory (around 1.1%) in past 2 years based on online Census data. So, I was wondering the significant growth of Huntsville and Madison in general is kind of getting the Decatur economy grow as well.

As an investor, Athens is a great option but most of the properties have priced in the future appreciation. It's statistically hard for me imagine a city/town 15 to 20 mins from Madison would continue to see a downward trend when the growth in Huntsville is phenomenal.

After I made this post, I have been talking to several investors in Huntsville market. There has been mixed opinions. Some say they don't prefer Decatur while others think assets in Decatur are currently on discount due to negative talk. One guy told me they talked to City administration and developer incharge recently and City is encouraging huge apartments build out while working on problems caused by the bad leadership over past decade.

Just sharing the info I got over past 2 days. I may be wrong.

Michael S. · Answer

@Bharath Mun - I am going to repost one of my comments from a few months ago about Decatur as an FYI for you.

Original post:

"I have lived in north Alabama for over a decade - in all the years I've lived here, the only reason I've gone to Decatur was for the kids soccer games at the Jack Allen Soccer Complex (which is quite nice).  That's a red flag.  The other comment about the schools there by another poster above is also a red flag.

As for the comments about Decatur growing - I am not seeing the data for that.

Here's the population growth over the past decade:

Athens 32.8%

Madison 23.5%

Huntsville 13.6%

Florence 3.6%

Decatur -2.2%  (yes, the population has decreased)

That trend, to me, is quite concerning."

So, to summarize, we will buy pretty much anywhere in North Alabama. . .except Decatur.

Bharath Mun · Answer

Thanks @Laurie McGuire.

Can you elaborate on what locations would you avoid primarily ?

Laurie McGuire · Answer

@Bharath Mun

Self-Storage facilities around Hunstville. Saturated or growing ?

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